One thing for the husband to consider... by making you two "forbidden fruit" to each other he may actually be making your infatuation with each other that much stronger, even while you're hurting over it... that's how these things often go. Is that really what he wants?

I think everyone has acted admirably here, but if he really cares about you two he needs to recognize that you're adults with needs and this is a little silly... if you two are so emotionally entangled, that's just as potent and just as much (really just as little) of a threat to him as if you were physically entangled too. Does he really want to deal with his wife's depression and resentment if she loses you because you can't take it any more?

Thank you! These are great points and intend to bring them to her attention.